Alabamians still paying more for insurance, but premium growth slows

View full size(Mobile Register file/G.M. Andrews)The owners of this home leave information for insurance and FEMA adjusters on the wreckage of their Shell Belt Rd. home in Bayou La Batre, Ala. on Saturday Sept. 3, 2005. New data shows that Alabamians still pay more for insurance than the national average, though the rate of growth has slowed.New data show Alabamians are still paying more than the national average for homeowners insurance, although premiums aren't rising as fast as the spikes seen since 2002.

The average premium for a homeowners policy in Alabama rose 1.2 percent, or $11, to $904, according to data from the National Association of Insurance Commissioners, or NAIC. That was the 12th highest among the states in 2007, the most recent year available.

The NAIC annual survey provides the only public data on homeowners insurance costs in Alabama.

No separate numbers for insurance prices along Alabama's coast were available, but average prices are known to be higher.

Calculations of how much it costs to cover $100 worth of property with homeowners insurance show that states exposed to hurricane and tornado risks pay the most. Here's the most that the average policyholder paid, on average, in the top 10 states:

Louisiana $1.12

Florida $ 1.02

Texas 97 cents

Oklahoma 84 cents

Mississippi 82 cents

Nebraska 65 cents

North Dakota 62 cents

Arkansas 61 cents

Alabama 60 cents

Kansas 60 cents

Source: Press-Register calculations from National Association of Insurance Commissioners data. NAIC warns that data from Florida and Texas may not by strictly comparable. In Texas, insurance forms are slightly different, while in Florida, a large share of customers are covered by a state-run insurer not included in the survey.

The average premium for a policyholder in the Alabama Insurance Underwriting Association, the insurer of last resort known as the Beach Pool, was $2,362 in December 2007. Such insurers are not included in the national survey.

Homeowners nationwide paid an average of $822, up 2.2 percent from 2006.

It was the first time in five years that Alabama's premiums rose by a smaller percentage than those nationally. State homeowners have gone from paying 10 percent less than the national average in 2002 to 10 percent more in 2007.

"Satisfied is probably not the right word, but we're comfortable with where we are compared to the other coastal states," said Alabama Insurance Commissioner Jim Ridling.

Policyholders, though, are still feeling the pinch. Leo Gayle, a Whistler resident active in the Homeowners' Hurricane Insurance Initiative, said more and more people are going without insurance.

"A lot of people can't afford to cover their homes," Gayle said.

Ridling said an informal analysis by the department showed slow to moderate growth in premiums in 2008.

Besides comparing the states on average premiums, the survey gives an idea of how much people pay per dollar of insurance coverage and the bite that insurance payments take from family income.

It found that the typical Alabamian bought between $150,000 and $200,000 of homeowners coverage in 2007. To secure that coverage, insurance customers in the state paid as much as 60.3 cents per $100 of coverage, the ninth-highest rate in the country.

Louisiana, where the typical policyholder paid $1.12 per $100 of coverage, had the nation's highest rate.